Aggressive · Stocks to Consider and Updates

Gilead Sciences Still Struggling for Growth; Raises Guidance

Bio-pharmaceutical company Gilead Sciences, Inc. (NASDAQ: GILD – $74.35)  reported adjusted third-quarter earnings and revenue above expectations. Gilead said it earned $2.7 billion, and adjusted for one-time items, the company earned $3 billion, or $2.27 a share, compared with $3.7 billion, or $2.75 a year ago, but $0.13 better than analysts’ views. Revenue fell to $6.5 billion, compared with $7.5 billion a year ago. But slightly ahead of Street estimates of $6.4 billion. The company expects net product sales between $24.5 billion and $25.5 billion for the year, compared with a previous estimate of sales in a range from $24 billion to $25.5 billion.

       Company executives warned on a conference call that the worst is yet to come for the pharmaceutical company’s hepatitis C treatments, which saw a 33% sales decline during the quarter. Sales were hurt by more competition from generic drugs as the company’s patents expired. Antiviral sales fell $1 billion to $5.8 billion as declines in treatments for hepatitis C offset growth in sales of HIV and hepatitis B treatments. On the expected sales growth of non-hepatitis C treatments, Gilead raised the low-end of its full-year revenue forecast. It also boosted its adjusted fourth quarter per-share earnings outlook to a range of $1.02 to $1.17, from $0.86 to $0.93. Earlier this month, Gilead closed its $11 billion acquisition of Kite Pharma Inc. in a bid to diversify its portfolio and add new streams of revenue to quell investor concerns about flagging sales for certain drugs. The pop in share price, however, was short-lived and the stock is trading at levels before the Kite news. The shares are highly speculative at this juncture, but I will hold on to GILD for long-term recovery.

 

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